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An estimated two-thirds of baby boomer households will receive an inheritance at some point, with a median amount of $64,000, according to an AARP study. I recently received an email from a reader who has fallen deeply into debt in anticipation of her legacy -- and is now worried that her bailout may not be at hand:

I read your informative article about paying down credit card debt and felt somewhat hopeful. I'm in a similar bind. I've built up considerable credit card debt, but in my mind I rationalized it by knowing that eventually I will come into some money when my father and my employer die (in both their wills -- boss is 90 years old) and I can use that money to pay down the debt. Well, no one is dying and I'm getting scared. I make a good salary but it's not covering my debts and expenses. I need to do something but I don't know what. I know there are debt consolidation companies but I don't know if that's the right way to go. I've heard they are no better than filing for bankruptcy. Any help you can give, would be greatly appreciated.

Your situation is troubling from both a practical and philosophical perspective. First there's no guarantee you'll get the promised inheritances. The funds you're counting on may be exhausted by the time your potential benefactors die, as end-of-life health care is outrageously expensive. One government study shows 30% of Medicare spending goes to medical treatment for beneficiaries in the last year of life.

The money could also be diminished by fluctuations in the stock market or by terrible investment advisers (think Bernie Madoff). Moreover, your father and boss could realize you're gaming their departure, and in a pique, choose to leave their money to charity instead. Or they might meet that special someone who quickly spends it -- or diverts it away from you. (Oil tycoon Howard Marshall II was 89 when he married the 26-year-old Anna Nicole Smith.)

And it's kind of sad, objectifying these people as if they were bank accounts. The risk is that instead of warmly desiring the best for them in their golden years, you whip out your mental calculator every time they pay for a vacation. The prospect of inheritance can also give them an unhealthy measure of control over you.

Most crucial of all: How will you wisely manage an inheritance later when you're not on top of your own finances now? Without smart planning skills, it's pretty easy to imagine that you'll pay off your credit cards when the influx of cash arrives, then quickly run them up again.

The desire to relinquish control of your financial life -- to a family member, inheritance or a debt consolidator -- indicates a belief system that says: "I'm helpless; I will hope to be rescued." Sadly, the predatory nature of most financial services (and, frankly, some family members) means you are likely to be victimized over and over under the guise of "help."

The other possibility is that you are a smart, well-adjusted, educated person who has simply not been paying attention, and perhaps you lack the confidence that comes with experience. If that's the case, the solution is to find a tool that forces you to track exactly where your money is going, and direct it in more meaningful ways.
Getting a Real Financial Plan Up and Running

Limit your spending to necessities for now and get yourself a good budgeting tool (I recommended some in this article) to free up cash to pay down your debt. The article you mentioned explains the basics of how to get out of debt. For a little more guidance using a Weight Watchers-like approach, consider the website DebtGoal.com, which offers tools to help you understand your debt, speed your pay-down and track your progress. (It costs $15 a month after a free trial.) Payoff.com is another recent entrant into the business: It's free to users, but the site features advertising.

Because you earn a good salary, steer clear of the debt-reduction industry. It's rife with scam artists, but even the legitimate firms may push you into an unsuitable repayment plan because that's how they make money. In the meantime, you learn little about managing your own finances, and your credit score gets trashed.

Briefly, here's how "debt reduction" works: In traditional debt consolidation, you repay the full principal at reduced interest rates, with fees removed. The firm collects a monthly payment from you and distributes it to creditors. You're typically debt-free in three to five years. Debt-settlement firms, on the other hand, often tell you to stop paying your debts and pay them instead, so they can collect a lump of your cash to settle with your lenders. The bad guys charge enormous fees and disappear with the lump of cash, leaving you with even bigger debts and enormous legal headaches. (See this Federal Trade Commission bulletin for more information.)

Instead, get educated. You can find affordable or free personal finance classes through the Cooperative Extension Service, part of the Department of Agriculture. You can also take a fundamentals class for free online from the University of California, Irvine (available through the OpenCourseWare Consortium program.) Crown Financial Ministries and Dave Ramsey's Financial Peace University also offer affordable, semester-long classes on the basics, but with a Christian orientation that promotes zero debt and tithing.

Don't sell yourself short. There is a deep sense of well-being that comes with knowing you can take care of yourself, no matter what happens. Forget about the inheritances for now. Wish your father and your boss wonderful times in their final years, and if a little cash comes along, enjoy it. But don't depend on it.

Absolutely right! You have to get educated and learn to change your habits. Even if these people do leave her a lot of money when they die and she completely pays of the debt, it won't be long before she's in debt again because she hasn't changed any habits.

True change in her situation will not happen until she changes the way she's doing things. If she would just take the basic steps of putting together a get out of debt plan and a monthly spending plan that she can stick to, she can be out of debt before these two people die and she can then save that inheritance for her future or enjoy it instead of having to immediately send it elsewhere to cover her debts.

I teach these concepts in my Celebrating Financial Freedom self study course that I've developed. I've seen them work so well to change people's lives. All it takes is a little bit of knowledge and just being dedicated to seeing it through.

Let sanity prevail...you know what I mean by that...if you leave a legacy channel it to the right place. Don't let you kids or any one else con you. Now here is a pice of advice...if you have substantial ESTATE get of of a State that has Estate or Inheritance Taxes...the last thing you want to do is let your State take some of your money. Good Luck

You can't live on gravy, you need the meat, which you can live on without gravy. Plan like you'll never get anything, because that senior generation is only one medical procedure away from being destitute anyway. Don't expect inheritance or social security. If they do arrive, then you can have a fun retirement. If they don't, and you've been mature in your saving plans, then you can at least exist. Those who scoff at the ants and live the grasshopper life have an experience coming shortly as the new conditions take effect with social programs.

Its really sick if someone waits for someone they"love" to die, so they can cash in. I hope those that do, get nothing, and the money gets donated to charity : ) I told my parents I dont want a dime... They earned it, they should enjoy it now. if they run out, I will help them. I would love to sit in an antorneys office when he opens the trust and tell the rest of the family there is only 99 cents left! Lol That would mean they lived life to the fullest.. Kids need to work for their money, hell, if they get themselves in a financial mess, they need to dig themselves out. Only then will they appriciate what they have...

If I catch my daughter waiting for her inheritance I will leave it to Warren Buffet instead who will leave it for Bill Gates and that way the government will never ever get a dime of my estate even though both of them want their taxes increased somehow.

Never ever believe what a lefty says because they are pathological liars, but watch very closely what they do instead.